Western Union Business Solutions, the global business payments expert, is urging British SMEs to settle their January 2014 Renminbi (RMB) invoices before the Chinese New Year holiday in order to ensure on-time payment delivery to their suppliers.
The Chinese New Year and Spring Festival Golden Week Holiday falls between 30 January and 5 February in 2014, during which time no payment processing can be executed to China, Hong Kong (31 January – 3 February 2014) and Macau (31 January – 2 February 2014).
"Renminbi payments continue to grow amongst British companies," said Jonathan Rees, UK Managing Director of Western Union Business Solutions. "Businesses would do well to settle their RMB invoices before the New Year holidays in order to avoid potential late payment fees and broken contracts associated with set payment dates."
With imports from China rising to a record £8.6 billion as well as Britain's exports to China increasing 9.6 per cent to £3.3 billion in the three months to November 2013, British businesses can look to capitalise on the two-way nature for the British-Chinese trading network. With the International Monetary Fund projecting UK growth of 2.4 per cent in 2014, it is widely felt that increased sales to China and other emerging markets will be essential drivers for a sustainable British economic recovery.
"The UK economy is in a healthier position that many other Western markets," Jonathan Rees continued. "Given the current value of sterling, now is the perfect time for Britain's smaller importers to capitalise on strengthening British economic conditions and look at their supply chains with international markets, China being no exception. Companies that adapt and work with their Chinese partners to take advantage of trade opportunities ahead of the holiday period will be well-placed to build good will and improve their business relationships."
For British businesses that export to China, settling payments ahead of the holidays could be of particular importance. Requesting payment from Chinese trading partners before 30 January or planning to receive funds after 5 February are two tactics that would help companies avoid potential cash flow issues.
"Britons are not necessarily used to the concept of a week-long national holiday. It is therefore vital for companies trading in RMB to pencil the Chinese New Year period into calendars each year and plan wisely to ensure their cash flow is protected," said Jonathan.